Organisations perform better when leaders have done the same job as followers

23. September 2012

Amanda Goodall, Ganna Pogrebna,23 September 2012, voxeu

Senior Research Associate at IZA Institute for the Study of Labor

Leverhulme Research Fellow in the Department of Economics, University of Sheffield

In recent years major firms have moved away from hiring CEOs with technical expertise towards instead hiring leaders who are managers with generalist skills. This is wrong, according to the evidence presented in this column. In the highly-skilled setting of Formula One racing, the authors show that it is the experts who excel as leaders not managers.

Should a boss have worked on the shop floor? This gets to the question of how much business knowledge leaders should have about the organisations they are to lead. There has been a trend in recent years to promote into leadership positions individuals who are skilled managers, but who do not necessarily have either a background in the sector concerned, or hands-on experience of the core business activity. Similarly, there is recent evidence that major firms have moved away from hiring CEOs with technical expertise, towards instead the selection of leaders who are generalists (Frydman 2007; Bertrand 2009).

Several studies argue that as well as managerial skills (such as the ability to set standards, distribute tasks, and initiate performance discussions), it is technical competence (such as knowledge and skills specifically related to the industry of leader’s employment) that increases organisational performance (e.g. Andrews and Farris 1967; Barnowe 1975; Goodall 2006, 2009, 2012).

Expert leaders vs. managers Read the rest of this entry »

Meet the New Boss: Big Data

21. September 2012

Date: 20-09-2012
Source: The Wall Street Journal

Companies Trade In Hunch-Based Hiring for Computer Modeling.

At an increasing number of companies, the hiring boss for rank and file jobs is now an algorithm — and the computers are considering factors that are very different than what applicants have come to expect. Joseph Walker has details on The News Hub.

When looking for workers to staff its call centers, Xerox Corp. used to pay lots of attention to applicants who had done the job before. Then, a computer program told the printer and outsourcing company that experience doesn’t matter.

The software said that what does matter in a good call-center worker—one who won’t quit before the company recoups its $5,000 investment in training—is personality. Data show that creative types tend to stick around for the necessary six months. Inquisitive people often don’t.

“Some of the assumptions we had weren’t valid,” said Connie Harvey, Xerox’s chief operating officer of commercial services.

After a half-year trial that cut attrition by a fifth, Xerox now leaves all hiring for its 48,700 call-center jobs to software that asks applicants to choose between statements like: “I ask more questions than most people do” and “People tend to trust what I say.”

For more and more companies, the hiring boss is an algorithm. The factors they consider are different than what applicants have come to expect. Jobs that were once filled on the basis of work history and interviews are left to personality tests and data analysis, as employers aim for more than just a hunch that a person will do the job well. Under pressure to cut costs and boost productivity, employers are trying to predict specific outcomes, such as whether a prospective hire will quit too soon, file disability claims or steal. Read the rest of this entry »

Making Advanced Analytics Work for You

20. September 2012

by Dominic Barton and David Court, HBR 10/12

Big data and analytics have rocketed to the top of the corporate agenda. Executives look with admiration at how Google, Amazon, and others have eclipsed competitors with powerful new business models that derive from an ability to exploit data. They also see that big data is attracting serious investment from technology leaders such as IBM and Hewlett-Packard. Meanwhile, the tide of private-equity and venture-capital investments in big data continues to swell.

The trend is generating plenty of hype, but we believe that senior leaders are right to pay attention. Big data could transform the way companies do business, delivering the kind of performance gains last seen in the 1990s, when organizations redesigned their core processes. As data-driven strategies take hold, they will become an increasingly important point of competitive differentiation. According to research by Andrew McAfee and Erik Brynjolfsson, of MIT, companies that inject big data and analytics into their operations show productivity rates and profitability that are 5% to 6% higher than those of their peers (see “Big Data: The Management Revolution” in this issue).

Even so, our experience reveals that most companies are unsure how to proceed. Leaders are understandably leery of making substantial investments in big data and advanced analytics. They’re convinced that their organizations simply aren’t ready. After all, companies may not fully understand the data they already have, or perhaps they’ve lost piles of money on data-warehousing programs that never meshed with business processes, or maybe their current analytics programs are too complicated or don’t yield insights that can be put to use. Or all of the above. No wonder skepticism abounds. Read the rest of this entry »

The Unintended Consequences of Good Ideas

20. September 2012

by Charles Handy, HBR 10/12

To drive through Europe, as I did this summer, is to see history recorded in city skylines. Their buildings reflect the transfer of power through the centuries, beginning with the old castles (now museums and grand hotels). Below them, in the city centers, are the parliamentary palaces of the people. These, in turn, are dwarfed by the towers of the corporate world, where the real power now lies.

They’re full of paradoxes, those towers. Built of glass, they are impossible to see into. The names emblazoned on their doors and rooftops are, as often as not, words or initials that convey no meaning. To most passersby, these are anonymous organizations, run by anonymous people, who are the appointed agents of anonymous investors. The economic engines of democratic societies, they are as centrally controlled as any monarchy and squat in the midst of democracies like islands unto themselves. No wonder there’s a growing perception that their power has escaped popular control—and that the concerns of wider society are being ignored. Read the rest of this entry »

Data Scientist: The Sexiest Job of the 21st Century

20. September 2012

An article by Thomas Davenport from the October 2012 Harvard Business Review (Special issue about Big Data)

a new role is fast gaining prominence in organizations: that of the data scientist. data scientists are the people who understand how to fish out answers to important business questions from today’s tsunami of unstructured information. as companies rush to capitalize on the potential of big data, the largest constraint many face is the scarcity of this special talent.
no university programs have yet been designed to churn out data scientists, so recruiting them requires  creativity. look for achievers in any field with a strong data and computational focus, which might take you as far afield from business as experimental physics or systems biology. recognize, too, that the aspects of a job that will attract and retain a data scientist may differ from what makes other professionals happy. Read the rest of this entry »

2012 – The Most Important Year Yet in Technology

19. September 2012

By Alex Daley, Casey Research, 19/9

Many of us fondly remember the announcement that rang with the turning of the millennium: “the first map of the human genome is complete!” It was a momentus achievement to be sure, even if it did take 13 years and cost about $3 billion. That’s because none of that mattered. It was going to rush in the age of the genetic medicine, and chronic disease would be a thing of the past. Even aging could be reversed.

So, what happened to all the promise? you may wonder. Well, it’s still there. But the problem is, science fiction authors and technology magazine scribes love to announce the arrival of the future as soon as the first scientific discoveries hint at its possibilities. That creates irrational expectations, because the progress of science – from an experimenter’s vision through to technology that can be widely distributed in a commercially viable way – is not instant. Of course, industry insiders know this, and analysts like Gartner even have entire reports dedicated to the “hype cycle” concept. But, that does not stop the average journalist from prognosticating about the possibilities.

Nevertheless, progress does march forward steadily, in the background. And, when it finally breaks through from the lab to the market… boom! You have an iPhone, a flat screen television, a multi-billion dollar blockbuster drug. The last few years have brought some incredible changes, for sure. But, the big promises – genetic medicine among them – might still seem unfilled to many. But, change can come in bunches, making certain years stand out as watersheds in technology. And, 2012 might surprise you as one of those.

Consider just a few of the most vaunted areas of technology to not quite fulfill their promise just yet:

A Future Without Paper (and Books and CDs and DVDs)

It’s long been the goal of many a business to go “paperless.” To scrap the mounds of pulp and ink that once lined hallways and storage rooms of offices around the world, we pushed the limit on storage, bandwidth and our ability to digitize nearly any piece of information.

Unfortunately, the consumer always trailed a little behind business in this regard. Our lives are replete with stuff. Things. Trinkets. Junk. There is likely some Neolithic impulse driving our desire to line the walls of our homes with the things we’ve collected from our travels, whether to Tibet or the local shopping mall.

And, for a great long time a large amount of that stuff has been media. Books. Records come CDs. Libraries of VHS or DVD movies. Recorded media has been a big business since the dawn of the mass manufacturing revolution.

Yet, at the turn of the millennium following the release of countless MP3 players we were told, like the paperless office, that the end of physical media was upon us,. The recording industry would never survive the era of free digital downloads. The first shots were fired in the late 1990s with the dawn of Napster and the mass swapping (cough, stealing) of songs across college and corporate campuses, and the Internet. Music was going digital and it was never going back.

But, by the end of 2001, following the release of Apple’s iPod, only 1% – a single lone digit – of the sales of recorded music was digital. For years, pundits decried the fall of the record, yet five plus years later the aisles of Walmart and Best Buy were still lined with CDs.

Fast forward to 2012 and the story is much different, however. For this year will be the first in history when 50% of all music media sales globally have gone digital. Music went digital when we all stopped watching the iPod and paying far more attention to “apps” and tablets and smartphones.

And, books are now following in the footsteps of music, which of course had a head start. Amazon’s Kindle e-Reader, the iPod-like dominator that truly launched the era of the digital book, didn’t surface for consumers until 2007 – a full six years after the iPod. But, don’t let that lull you into thinking it’ll be a while before books go digital. Thanks to the accelerating pace at which new technologies are being adopted once released, the Kindle and the e-book have caught up mighty quickly.

In January 2012, a full 31% of all books other than academic textbooks sold in the US were sold in digital form. That’s all adult fiction, non-fiction, and children’s books. And that was before people started using the tens of millions of tablets, like the iPad and Kindle Fire, and e-Readers such as the revised Kindles and Barnes & Noble’s Nook line of readers, that they gobbled up at stores that very holiday season.

Despite music’s lead, if the growth rate in e-books has been holding through this year, as most surveys of the business indicate is the case, then by this point in 2012, 50% of all new books sales in the US will be digital. That’s just less than half the time it took for the same to happen to music, and ahead of what promises to be another big holiday season for tablets and e-book readers.

Thanks to the Internet, and the new classes of mobile devices, half of all books and music purchases are now done digitally.

Video, however, is the king of media by most measures – most hours per person per week spent consuming it, most revenue by a country mile if you include movies, cable and satellite TV subscriptions, broadcast, all the advertising those bring in, plus physical media. And, video has been a bit slower to see the transition, with only a smidgen of the colossal industry succumbing to the emergence of Internet delivery. Read the rest of this entry »

What Technologies Will Crowdfunding Create?

17. September 2012

Date: 17-09-2012
Source: Technology Review

Super-users, hobbyists, and gadget fans are investing in innovations they want, and creating a new generation of entrepreneurs along the way.

It’s becoming a common story. A project listed on Kickstarter, the Internet crowdfunding website, ends up wildly exceeding its financial goals. Suddenly, someone is in business.

That’s what happened to inventor Jay Silver, creator of MaKey MaKey, an “invention kit” consisting of a processor board and alligator clips that turns objects with high electrical resistance—bananas, Play-Doh, human flesh—into computer controllers. Silver listed the project on Kickstarter this year hoping to raise $25,000. He ended up with $568,106.

Since then, it’s been a race to negotiate with Chinese manufacturers, customs agents, and wholesalers to produce and ship what will be the first product of Silver’s newly incorporated company, JoyLabz. “I was going to start this company in a few years, but my crowdfunding success accelerated the timing,” says Silver, who is 33. Read the rest of this entry »

The real cost of an iPhone 5: life in the Foxconn factory

13. September 2012

Date: 13-09-2012
Source: The Guardian

An undercover reporter joined thousands on the production line battling to meet deadlines for iPhone 5

Any committed foodie will wax lyrical about the value of provenance – the integrity of the food, the care and craft behind creating it. How long, then, before this middle-class preoccupation with quality, traceability and plain goodness of the things we buy extends into technology?

We suspend our ethics when Apple launches a new phone. That unboxing is a virgin moment, as if the phone morphed inside the box from the tiny sparkling seed implanted by Jonathan Ive. Slide your finger through the  Designed In California seal and your phone takes its first breath…

It’s a supreme piece of packaging design, but the reality is far from an immaculate conception. Foxconn, the Chinese manufacturer of iPhone, has faced a steady stream of criticism and concerns from poor working conditions to suicides.

Now the Shanghai Evening Post has published a detailed diary of working life at the Foxconn production plant by undercover journalist Wang Yu. He lasted 10 days in the plant, seven of which were in training, and three on shifts “marking placement points on the back plate”. Foxconn recruited 20,000 new workers in March to meet its production targets for iPhone 5, and has to produce 57m in one year, Wang’s report stated.

No doubt much of the nuance has been lost in this translation by, (who bafflingly signed off from this piece by saying how excited they were about seeing the new iPhone 5) but Wang complains of having to work on 3,000 phones during a 10-hour shift, paid only 27 yuan ($4.27) for two hours’ overtime. Read the rest of this entry »

Will Apple’s Focus on Profits Let Its Rivals Jump Ahead?

11. September 2012

Date: 11-09-2012
Source: Technology Review

Pocketing profits instead of investing in innovation is how market leaders turn into has-beens.

As golden geese go, it’s pretty hard to beat the iPhone. In the five years since Apple introduced the first model, the company has enjoyed booming sales and ever-increasing profit margins. Revenues this year will top $150 billion, six times what they were in 2007. Apple’s profit margin over the past nine months (the first three quarters in its 2012 fiscal year) was an astounding 28 percent, double its level in 2007.

But the real miracle is that Apple has kept growing, and widening its profit margins, even as it has been eclipsed by its biggest rival, Google’s Android system. In 2010, the two platforms were about even in terms of market share. But today Android held four times as much share as Apple. Read the rest of this entry »